Fit and Family-Owned Business

by Bruce Walton, Partner in Battalia Winston’s Family-Owned Business Practice

When I’m helping family-owned businesses find new executive leadership, I often hear the following: “We want to find someone who is the right fit.” This word—fit—is difficult to define, yet is always key to a successful hire. When assessing candidates for fit, it’s helpful to use the following questions as guiding principles:

Fit really means linking the value systems and leadership style of the executive candidate with those of the hiring company. In fact, “value systems linkage” is the best predictor of happiness, in all its dimensions, for any hire. Therefore, for a family-owned business, where hiring a non-family CEO can often feel like arranging a marriage, fit is particularly important.

Naturally, the starting point for the hiring process is understanding the Core Family Values that drive the business. Businesses that have survived across multiple generations have invested much thought in the development of family values. They are typically recorded somewhere, either in a corporate handbook, website, or other core material. If this is not the case, formalizing and recording corporate values is an important exercise to complete before starting a CEO or COO search. Since the family can never be separated from the business, these core values will drive decisions that otherwise would be hard for an outsider to understand.

2. Does the candidate possess the most important competencies for the position?

When a candidate clearly aligns with the family’s value system, it can be tempting to conclude that the candidate is automatically a great fit. However, it’s important to move the decision beyond “I like them.” This is why a position competency model, designed to measure the candidate’s specific skill set against the company’s business goals, is critical. The key is to build a competency model that helps separate and prioritize the must-haves from the nice-to-haves. Nobody will be a perfect match on every competency, but the best candidate will have successfully demonstrated the top three to five competencies in the recent past.

3. Will the candidate be a steward of the family’s success?

When I try to consolidate all of the aspects of fit for family businesses, the single word that comes to mind is “stewardship.” Good candidates understand and appreciate what the family has already built. The new CEO becomes a steward of that success, even when the mandate is to transform the company. Family members in the business, ownership or governance have their own self-images (both within the family and in the community or industry) so tightly connected to the business that outside leadership needs to account for it and factor it into the leadership process.

To be a successful steward for the company, the candidate must be a confident adult who is prepared to handle sensitive situations that will arise within family businesses. For example, a mature non-family CEO will be able to react appropriately when ownership wants to drill down into the details of the business, as they always do at some point. The mature steward will not be threatened by this, while an insecure autocrat will not react well.

Investor Relations (IR) also deserves some thought. Every CEO spends a significant amount of time caring for the company’s owners. In public or private equity owned companies, this is pretty clear. In a family-owned business IR involves multi-generational dynamics and strong emotions. It may involve dealing with a Family Council or helping educate a new generation to be successful future owners. So IR does not go away; it is just very different.

In summary, the “best fit” candidates will embrace the core family values and have the capacity and patience to deal with family dynamics without becoming embroiled in them. At the same time the non-family leader will have the right core competencies to lead the business to success, however it may be defined.

DAS Companies, Inc. is a high growth, profitable, and privately held $350 million marketing and global supply chain portfolio company. The company has strategic goals of becoming a $1 billion organization and is in the process of implementing 21st Century leading edge technologies and streamlining supply chain cycle time. DAS designs, imports and distributes automotive accessories, travel merchandise, and mobile electronics that add safety, convenience, comfort and leisure for on-the-go consumers, through a series of channel partnerships including travel centers, heavy duty trucking centers, and electronics and specialty retailers. The successful candidate was identified in 9 days and the search was completed in 83 days by Terry Gallagher.

Timothy most recently was Director, Information Technology at New Penn Motor Express, a $250 million transportation company providing regional, next day ground services through a network spanning the Northeastern United States, Quebec, Canada and Puerto Rico. Timothy oversaw the day-to-day IT activities and an annual budget of $7 million. He overhauled the Information Technology environment, established an IT Steering Committee and developed and ratified a 4 year IT transformation plan.

Prior to New Penn Motor Express, he was Director, Information Technology at The Ames Companies. He managed all day-to-day IT activities, an annual budget of $7 million and spearheaded strategic development efforts on a global scale. He implemented new metrics and KPIs, cultivating a continuous improvement culture throughout the IT Department and promoted business growth by integrating the e-commerce platform to better capitalize on B2C, B2B, and B2B2C opportunities.

Earlier in his career, he was Director of IT for the North American Region at ESAB Welding & Cutting Products, a $1 billion global manufacturer of professional welding and cutting machinery and associated consumables, servicing customers via a multi-facility manufacturing and distribution system.

Timothy earned his M.S. in Management from Purdue University and his Bachelor of Science in MIS from Clarkson University and has completed Six Sigma Black Belt Training Programs.

Battalia Winston International announced today that Susan Oliver has joined the firm as Partner in its Life Sciences Practice.

Susan has more than 20 years of experience conducting executive and board level searches for companies in the biotech, medical device, and pharmaceutical industries.

Drawing from her deep understanding of critical issues in the life sciences sector, including clinical and regulatory affairs, specialty pharmaceuticals, and drug/device combination therapies, she identifies high-performing executives who provide transformational results for her clients.

Susan began her recruiting career at Heidrick and Struggles and later joined Korn/Ferry International as a key member of the firm’s Consumer Products and Advanced Technology Practice. She co-founded Oliver John Partners, where she conducted executive searches for pharmaceutical, biotech, retail and consumer packaged goods firms. Before joining Battalia Winston, she served as Managing Partner of NGS Global’s Life Sciences Practice.

“My approach to executive search centers on two primary goals: delighting my clients and ensuring that my candidates feel appreciated for the time and effort they’re investing with me,” said Susan. “My success in search is largely due to my commitment to creating long-lasting relationships with my clients. Their success is my success.”

Susan’s executive search approach is also informed by her keen understanding of the most pressing issues in the life sciences industry.

“Both biotech and device companies continue to be under pressure to produce improved clinical outcomes in a challenging regulatory environment,” explained Susan. “As a result, our clients have to be better, smarter, and more efficient than their competitors. My job is to help them attract and retain the talent they need to do just that.”

Battalia Winston’s Life Sciences Practice specializes in recruiting executives and other senior-level leaders for a broad spectrum of companies, including clients in the pharmaceutical, biotechnology, medical devices and equipment, diagnostic and consumer health, and animal health industries.

“We’re thrilled to have Susan join our team,” said Dale Winston, CEO and Chairwoman at Battalia Winston. “Her long track record of success in the life sciences sector is a valuable addition to our practice.”

Susan Medina and Peter Gomez, partners in Battalia Winston’s Diversity and Inclusion practice, have contributed an article to American Banker entitled, “Your Bank’s Diversity Efforts Aren’t Working. These Will.” The article is part of an ongoing American Banker series that examines gender and diversity issues in banking and finance.

We are pleased to announce that Anthony Lombardi joined The Andersons, Inc. on September 6, 2016 as Chief Information Officer. Terry Gallagher completed the search. The successful candidate was identified in 14 days, and the search was completed in 96 days.

The Andersons is a $4.5 billion diversified company rooted in agriculture conducting business across North America in the grain, ethanol, plant nutrient and rail sectors.

Mr. Lombardi most recently was Vice President, Global Business Services and Chief Information Officer at Armstrong World Industries, a global leader in the design and manufacture of floors and ceilings with net sales of $2.5 billion, operating 32 plants in nine countries and 7,600 employees worldwide. As Vice President, Global Business Services and Chief Information Officer, Mr. Lombardi led a multi-sourced global Information Technology and Finance organization of 400 staff located in the U.S., Europe, China, India, and Australia and a $67 million budget.

Prior to advancing to becoming CIO of Armstrong World Industries in 2010, Mr. Lombardi served as Director of Enterprise Applications for four years and Director of Global IT Infrastructure for six years. Before being recruited to join Armstrong World Industries, Mr. Lombardi advanced into IT management positions of increasing responsibilities for 17 years.

Mr. Lombardi earned his MS, Computer Science from Villanova University and his undergraduate degree in Computer Science from Moravian College. He has been quoted in CIO magazine and The Wall Street Journal and been an annual speaker at Society for Information Management’s IT Leadership Development Forum and a member of SIM’s Advanced Practices Council.

Fred Lamster recently contributed an article entitle, “The Changing Role of the Merchant” to Total Retail.

Merchants were once the only critical players in the retail industry. Their ability to drive the business by understanding the customer and predicting customer behavior made them invaluable to their organizations. However, now that “omnichannel” retailing is the new reality, the merchant’s role is rapidly changing. A merchant must now also be able to absorb enhanced analytics and work even more closely with design and marketing applications to understand and adapt to trends that satisfy quickly changing customer tastes.

Executives and HR leaders at retail companies are now asking themselves, “What does it mean to be a strong merchant, and how we can ensure that we retain and develop top merchants into future leaders?” Until recently, most retail CEOs or CHROs thought that augmenting a merchant’s skill set with leadership training was sufficient. Through informal programs — e.g., internal mentoring, coaching, etc. — they helped their merchants develop the capabilities necessary to lead a team of people.

However, in a rapidly transforming retail market, simply leading a team is no longer enough. Now, a merchant must embody a number of additional mission-critical competencies.

Battalia Winston is pleased to announce the placement of Gloria Lara as Chief Executive Officer of the Michigan Hispanic Chamber of Commerce (MHCC). Susan Medina, Partner in Battalia Winston’s Diversity and Inclusion Practice, completed the search.

Gloria Lara is the former CEO of the Girl Scout Council, where she served as the chief spokesperson for the organization and drove funding development efforts. Lara has extensive experience in finance, marketing, sales and project management and has held executive positions at IBM, Chrysler Corporation, and Jervis B. Webb Company, among others.

The Michigan Hispanic Chamber of Commerce is the largest and best recognized organization in Michigan that promotes the development, growth and visibility of Hispanic-owned businesses. MHCC members have a collective gross revenue of more than $3 billion, and the organization was recently named Chamber of the Year by the U.S. Hispanic Chamber of Commerce.

Susan Medina and Peter Gomez recently contributed the following article to Workforce Magazine.

Like several Silicon Valley counterparts, tech giant Intel last year went public with its lack of employee diversity. The company is openly sharing its efforts to correct the problem. In an interview with NPR, Intel CEO Brian Krzanich discussed his company’s diversity initiatives and concluded that the “pipeline problem,” or the idea that there aren’t enough qualified diverse candidates, is overhyped, saying, “If the pipeline was such a big problem, I would have come back as a failure.”

It’s true the pipeline problem is somewhat improving — at least at the entry level — for companies like Intel that have the budget to invest in targeted recruitment programs. As more companies formalize diversity initiatives, partner with educational institutions and community organizations, and train their hiring managers on the effects of unconscious bias, they will be able to bring in more diverse talent in their junior and mid-level ranks. For example, Apple reported a 50 percent increase in the number of African-Americans hired in 2015 compared to 2014, and a 66 percent increase in Hispanics.

But this improvement is not producing greater diversity representation in the C-suite. In 2014, only 4 percent of Fortune 500 CEOs were minorities, and only 5 percent were women. Move down the corporate ladder into the executive ranks and the percentages do not improve. According to DiversityInc, Hispanics make up less than 4 percent of senior management in U.S. companies. African-Americans make up less than 3 percent, and Catalyst reports that women of color are virtually absent at the senior-level and above in S&P 500 companies.Continue reading on Workforce.

Dale Winston recently contributed the following article to Associations Now.

With smaller, less hierarchical organizational charts, associations often struggle with attrition, losing aspiring leaders to other organizations. However, with a focus on better succession planning, leadership assessment, and onboarding, an association can slow the outflow of top talent.

Late last year, one of the largest health research foundations in the world approached our firm with an urgent request: It needed to find a transformational head of human resources to help the organization address an alarmingly high rate of employee turnover. The foundation was struggling to retain top performers within its junior- and mid-level ranks. The losses were creating disruption throughout the organization, particularly at the leadership level. Without a sufficient pool of “high-potentials” capable of moving up through the organization, the existing management team was unable to develop and nurture a pipeline of potential successors.

The article explores how the financial services companies in Chicago are working to attract and retain more diverse talent:

Susan Medina and Peter Gomez, Chicago headhunters who specialize in recruiting minority candidates for executive roles, said attention to diversity transparency in Silicon Valley and other industries has helped move the conversation in the right direction. But many efforts continue to be just lip service.

And there are more insidious challenges.

“When people think diversity, they think minority, and when they think minority, they think lowering the bar, and that’s a mindset that has to change,” Medina said.